ROBLEM 3 Sarah Company decided to change the depreciation method of an asset to SYD from SLM on January 2, 2023, at which time, the said asset is determined to have a remaining useful life of 10 years. This asset was purchased on January 1, 2013 for P1,100,000, on which on such date, the estimated useful life is 15 years. 3. What is the accumulated depreciation of the asset on December 31, 2023?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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